FG loses over N174 billion in products losses, pipeline repairs

– 21 oil pipelines vandalized in 24hrs, cripple fuel supply
– Kaduna refinery may be shut down after only 2 days production
– As vandalisation moves westward, North

ABUJA – The Nigerian National Petroleum Corporation (NNPC) has provided graphic details of how the activities of pipeline vandals have complicated the free flow of petroleum products and crude supply in its pipeline system leading to a colossal cost of over N174.57 billion in product losses and repairs of products pipelines within the last 10 years.

This is following disclosure by the Corporation of about 21 reported cases of vandalism carried out on Monday on critical pipeline carrying petroleum products to different parts of the country, notably to depots in Lagos and the Kaduna refinery.

The activities of the vandals, especially the case at Abaji, near Abuja, is said to have drastically cut out the supply of products to the Kaduna refinery, which only resumed operations last weekend, and may have to be shut down due to lack of products.

Speaking during a two-day series of presentation made separately to the Inspector General of Police, Ogbonnaya Onovo and the Chief of Defence Staff, Air Marshall Paul Dike, in Abuja, the NNPC management team led by the Group Managing Director, Dr Mohammed Sanusi Barkindo revealed that the advent of illegal bunkering, pipeline vandalism and product theft has massively impacted on the capacity of Nigeriaâ€™s massive oil and gas assets to function optimally.

Barkindo explained that though the combined working capacity of all the 21 Pipelines and Product Marketing Company (PPMC) depots nationwide, excluding holding capacities at the refineries, can provide products sufficiency of up to 32 days for petrol, 65 days for kerosene and 42 days for diesel, the activities of the pipeline vandals have made it impossible for the facilities to function full blast.

Backed with data to buttress the point, the NNPC GMD informed that a total of 16,083 pipeline breaks were recorded within the last 10 years adding that while 398 pipeline breaks representing 2.4 per cent were due to ruptures, the activities of unpatriotic vandals accounted for 15,685 breaks which translates to about 97.5 percent of the total number of cases.

According to records, the System 2E/2EX which conveys products from the Port Harcourt refinery to Aba- Enugu-Makurdi depots onwards to Yola-Enugu-Auchi appears to be the haven of pipeline vandalism in the country particularly the Port Harcourt-Aba/Isiala-Ngwa axis.

In all, 8,105 breaks were recorded along the system 2E within the period representing about 50.3 percent of the total number of petroleum products pipeline breaks in the country. The attacks left the NNPC with a cost of N78.15 billion in product loses and pipeline repairs.

The System 2A product pipeline route which conveys products from Warri-Benin-Suleja/Ore depots ranks second on the scale of pipeline break points with 3,259 cases representing about 20.2 percent of the total volume of products pipeline breaks in Nigeria. The figure also came with a loss of over N20.39 billion in products and pipeline repairs.

The System 2B which carries products from the Atlas Cove-Mosimi-Satelite-Ibadan-Ilorin depots recorded 2,440 breaks leading to a loss of over N73.6 billion in products and pipeline repairs.

On gas, Barkindo explained that the incessant attacks on the Trans Forcados Pipeline has rendered the TFP out of service since May 2009 thus making it impossible to evacuate crude oil/ condensate from some Shell operated facilities. â€œCurrently over 300,000 bpd and 140mscfd is deferred and about 55 vandalized points so far repaired at a cost of N11 billion,â€ he said.

The NNPC revealed that it spent over US$42.952million to execute a two-phase repair work which started in September, 2009 on 74 damaged points in System 2C-1. Escravos â€“Warri Crude Oil Pipelines to enable the start up of the Warri and Kaduna refineries.

â€œCrude Oil was introduced into the Warri-Kaduna segment on the 9th of February. Since then, 47 line breaks for crude theft have occurred on this segment resulting in condensate loss and repairs at an additional cost of N1.66billion,â€ Barkindo said.

As a way out of the pipeline vandalism the NNPC helmsman called on the armed forces to intervene urgently to secure these vital national assets. â€œVandalisation of oil and gas pipelines facilities remain the single most critical challenge facing our industry. The amnesty policy of government appears to be working but some criminal elements are still at work,â€ he said.

He stated that for deregulation of the downstream sector to be successful, there was every need for the countryâ€™s refineries to remain operational without incidences of pipeline vandalisation noting that in the last 24 hours, three points of the pipelines were vandalized across the country.

In his remark the IGP pledged the readiness of the Nigerian Police Force to assist the NNPC in its quest to fulfill its mandate.

â€œWe have a collective responsibility of serving the Nigerian people. I cannot imagine what Nigeria would be without proceeds from oil and gas, so we have a duty to protect that vital treasure base of the nation. We are together on this and we will do our best in this regard,â€™â€™ Onovo said.

In his response, the Chief of Defence Staff, Air Marshall Paul Dike assured of the preparedness of the Armed Forces to continue to provide security cover for oil facilities in the country and suggested the introduction of electronic devices for the protection of pipelines along with the physical presence of armed personnel.

â€œWe would stop at nothing to ensure that the NNPC continues to record successes in the oil and gas sector and we also want to thank the NNPC for its support to the force,â€ Dike reassured.
In his response, the Chief of Defence Staff, said the armed forces would intensify efforts at securing the pipeline

According to him, â€œWe shall continue to provide adequate security within our resources because we believe that even if all the officers of the Nigerian armed forces are deployed to cover the pipelines, they may not cover every inch of the pipelines effectively.

â€œTherefore, it is important for the NNPC to look dispassionately on the usage of electronic devices and such other gadgets for the supervision and protection of these oil pipelines. If we combine this with the physical protection given by the armed forces, I think we can solve the problem.â€

Dike noted that he was in touch with the commanding officers in the field, especially in the Niger Delta, adding that, â€œthe armed forces cannot fail; we will continue to assist the NNPC; we will stop at nothing to ensure that we continue to record the kind of success stories that we have done in the recent past.â€